At pilot or demonstration scale, green methanol-derived e-SAF costs roughly 4 to 6 times as much to produce as conventional Jet-A. Under favorable conditions at early commercial scale, the difference falls to approximately 3 to 4 times. Neither result has improved as quickly as projections made in 2022 and 2023 indicated. We examine where the gap stands today, what drives it, and what has or has not changed over the past three years.
The Production Cost Stack
Three main elements make up green methanol-derived e-SAF production cost: feedstock, process energy, and capex amortization. Their sizes differ, and scale-up and optimization affect each one differently.
At today's pilot and small-scale output, approximately 50 to 55 percent of cost is feedstock, meaning green methanol input. Process energy accounts for 20 to 25 percent, covering hydrogen for hydrogenation, electrical heating, and compression. Capex amortization represents 20 to 25 percent at pilot-equivalent throughput rates. Operations, quality assurance, and compliance documentation make up the remainder.
Before assessing an improvement, we need to identify which component drives the gap. Most process efficiency work, including ours, targets process energy and yield, not feedstock pricing.
Feedstock: The Main Variable
Green methanol is the main cost driver. In European markets, e-methanol made by CO2 hydrogenation with renewable hydrogen traded at roughly 700 to 1,200 euros per tonne in mid-2025, depending on renewable electricity and regional grid prices. Biomethane-derived methanol was somewhat lower, at around 600 to 900 euros per tonne, but volume availability is limited.
In European markets, fossil methanol, the comparison reference, costs around 300 to 420 euros per tonne at current prices. That feedstock difference alone represents roughly half of the e-SAF cost gap. Process engineering cannot remove it. It declines only with cheaper renewable electricity, lower electrolysis costs, and larger-scale green methanol production.
MtJ conversion adds a relatively modest cost beyond the feedstock. With a 30 to 37 percent mass yield, roughly 2.5 to 3.3 kg of methanol produces 1 kg of e-SAF. That yield ratio amplifies feedstock pricing, making it the main influence on final fuel cost. A 10 percent yield improvement cuts e-SAF production cost by approximately 5 to 7 percent, rather than 10 percent, because feedstock is only one cost component.
Process Energy Costs
MtJ uses energy mainly during hydrogenation, where hydrogen saturates the olefinic intermediates from oligomerization, and during heating and compression across the three reaction stages. Under our pilot benchmark conditions, process energy input ranges from 1.8 to 2.4 kWh per kg of e-SAF, depending on operation and heat integration efficiency.
Process optimization can materially change this part of the bill. At scale, the difference between the two ends of the range matters. Our pilot campaign benchmarks show incremental energy reductions across successive runs as the optimization layer improves heat integration setpoints and cuts unnecessary recycle. The headline remains 1.8 to 2.4 kWh, but disciplined process management can consistently reach the lower end.
Capex and Scale
Pilot-scale capex amortization per unit is high because fixed equipment costs are spread across limited throughput. This is the main reason pilot production costs exceed commercial projections, which assume throughput orders of magnitude higher.
Published engineering estimates for comparable synthetic fuel processes indicate amortized capex of 150 to 250 euros per tonne of e-SAF for MtJ plants operating at 20,000 to 50,000-tonne-per-year scale. That is well below the pilot-equivalent figure, but remains material. At pilot scale, amortized capex per unit can be 5 to 10 times higher than at commercial scale, depending on pilot financing.
The Trajectory from 2022 to 2025
Despite major investment in pilot programs, overall e-SAF production cost has not dropped dramatically since 2022. The main reason is that green methanol, the largest cost driver, has not become cheaper in line with early projections.
European renewable electricity prices were more volatile than expected in 2022 and 2023. Market disruptions pushed green hydrogen costs above the pre-disruption path, which raised green methanol spot prices. Electrolyzer costs are falling structurally, but not yet quickly enough to materially reduce spot-market green methanol prices.
Process understanding and, at some facilities, efficiency metrics have improved. We track our pilot benchmarks closely, and successive campaigns show incremental reductions in energy per kilogram of e-SAF. These gains are real, but they are not large enough on their own to close the gap with fossil Jet-A.
What Process Optimization Can and Cannot Fix
We are not saying process improvement can close the cost gap. The green versus fossil methanol differential is a commodity-market effect, not something process efficiency directly fixes. We are saying software and operating discipline improve conversion to saleable fuel.
Optimization improves the efficiency of converting expensive feedstock into saleable fuel. Raising mass-basis yield from 30 to 35 percent and cutting process energy by 15 percent lowers e-SAF production cost by approximately 8 to 12 percent, depending on feedstock pricing. At current green methanol prices, that matters, but it supplements rather than replaces savings from lower feedstock costs and larger production scale.
Process efficiency and feedstock savings compound. A 10 percent process-efficiency cost reduction combined with a 20 percent fall in green methanol pricing as electrolysis scales produces a larger combined reduction than either measure alone. Both are needed to narrow the gap in line with mandate timelines.
The Policy Variable
At today's prices, e-SAF is economically viable only with policy support. ReFuelEU supplies structural demand, while the UK SAF mandate does the same in the UK. The US SAF tax credit under Section 40B of the IRA provides a production incentive intended to accelerate early commercial volumes by narrowing the point-of-sale price gap.
Without these supports, e-SAF demand would rely on corporate voluntary sustainability targets. Those targets are real, but insufficient to finance commercial plants at the required scale. Policy incentives are bridging the gap, but the gap requires a long bridge.
Under optimistic assumptions for renewable energy costs, production scale-up, and cumulative process learning, green methanol-derived e-SAF could approach conventional Jet-A cost parity between 2034 and 2040. The range is broad because future green electricity pricing is genuinely uncertain and has the strongest effect on the outcome.
We are moving toward that point by improving conversion-step process efficiency, what we can control. We recognize which variables are beyond our control.